PAC 2015-16

Department of the Environment, Community and Local Government called and examined

[Extract]Deputy John Deasy: Mr. McCarthy and his officials are welcome. I seem to remember that the first time he appeared before us the household charge, which was the local property tax subsequently, and what percentage of that would be channelled back into local government arose as an issue.

There was a bit of debate nationally. The figure that was bandied about at the time was approximately 85% or 90%. According to Mr. McCarthy, the hope was that 85% would be thrown back into local government generally. Of the funds collected so far, how much has gone back into local government?

Mr. John McCarthy [Secretary General, Department of the Environment, Community and Local Government]: As the Deputy knows, local property tax, LPT, is collected by the Revenue Commissioners, after which the Minister for Finance moves an amount across into the Local Government Fund equivalent to whatever has been collected from the LPT. In effect, the full 100% of proceeds in 2015 are returning to local authorities.

This comprises two elements: 80% of the LPT in each local authority area returns to it while the balance of 20% is used for equalisation purposes in respect of the 17 or 18 local authorities that are otherwise at a loss by virtue of the introduction of LPT.

Deputy John Deasy: Everything goes back.

Mr. John McCarthy: Yes.

Deputy John Deasy: And has gone back. No one else has stuck a hand in and grabbed any part of the 20%.

John McCarthy: No. Some local authorities, by virtue of the way the formula works, are in receipt of a significant windfall gain. In terms of that windfall gain, those local authorities can keep the equivalent of 20% of the LPT proceeds in their area and they are expected to use the balance towards funding housing and roads programmes that would otherwise have been funded by the Exchequer.

Deputy John Deasy: Who has got the most money?

John McCarthy: It would be the Dublin local authorities because they would have the stronger residential property base.

Deputy John Deasy: It is as simple as that. The next issue came up with the Department of Public Expenditure and Reform. One of its most recent reports suggested that the abolition of town councils would be reviewed in some fashion.

I had a discussion with Mr. Robert Watt about how that would play out. Town councils have been abolished. I hear both sides of the argument regarding the Department's position. Some people are making the case that services have diminished as a result of the abolition in particular locations.

Some people tell me they have seen no difference. Does the Department have a plan to determine how people feel their services have improved or disimproved since the abolition of town councils?

John McCarthy: We are just coming now to the first anniversary of the new arrangements coming in since the town councils were merged with their counties.

The Minister has said that first anniversary provides an opportune time to see how those new arrangements have worked out in the first 12 months, acknowledging at the same time that the significance of the changes that were introduced are likely to take longer than 12 months to really come to fruition.

He has established a group to look at this, working with selective representatives to start to get a sense of the extent to which particularly the new municipal districts in place of town councils are working out in practice.

Deputy John Deasy: Can Mr. McCarthy flesh that out for me? How does this work? Getting feedback from councillors is fine. What exactly is the proposal? Is it piecemeal? Has it not been though through yet? Is there a definite plan with regard to surveying?John McCarthy: The modalities of how it actually works will need a little more time to work their way through. It is not a sense that we are in the business of reintroducing town councils, but-----Deputy John Deasy: I am not suggesting that.

John McCarthy: Absolutely, I know that. It is really to try to get a sense of the extent to which the new arrangements are or are not working out well in practice. We just need to work through how that will actually be done.

Deputy John Deasy: Is it right that there is no specific plan in place to determine whether there has been improvement or disimprovement when it comes to the abolition of town councils and the restructuring of local government generally?

John McCarthy: Yes, we are looking at that at the moment.

Deputy John Deasy: I think the Department should. This committee deals with how money is spent. The change was so transformational with regard to the local authorities and those living there that there should be a plan for how to determine that on an ongoing basis to see if things are working or not working.

Some people already have very definite opinions about the weaknesses in the system one year on. The Department should take a more proactive approach in determining whether this is working considering the amount of money we spend on local government. It is a fairly basic request when it comes to the provision of services for citizens trying to find out if they are getting value for money. I think it is fundamental.John McCarthy: One of the other pieces of work that will be important as part of that is the work the National Oversight and Audit Commission is doing on performance indicators for local authorities in order that we are in a position to be able to track performance under a range of headings between local authorities and over time. That will feed into it as well.

Deputy John Deasy: I do not know if the Department of Public Expenditure and Reform has moved that on at all. I do not know if Mr. McCarthy knows what I am talking about. It was discussed when Mr. Robert Watt last appeared before the committee.

John McCarthy: I am not familiar.

Deputy John Deasy: That is fine. By the end of 2013 there was an estimate of €103 million in expenditure on the Mahon tribunal. In September 2014 a final estimate was put on the planning tribunal at roughly €159 million. Where are we at with the tribunal right now? What is the estimated price tag?

Mr. John McCarthy: The estimate for the overall cost of the tribunal remains at the figure the Deputy outlined there. It was just over €158.5 million, almost €159 million. By the end of 2014, up to the end of last year, €111 million had been spent.

The balance of about €47 million is to be spent over this year and, it is hoped, next year, but the ultimate timescale for when the cost will finally crystallise will be partly determined by the resolution of a number of ongoing legal cases. The tribunal has confirmed, however, that the overall cost estimate of €158.5 million, about €159 million, remains valid.Deputy John Deasy: That remains. I obtained some information from Waterford County Council which is probably applicable to every local authority. It suggested that the allocation for roads in Waterford was 40% less than the allocation made in 2008. I do not know if that strikes Mr. McCarthy as being correct.

Those are the figures I obtained. It indicated there had been a massive drop since 2008. I am not quite sure why 2008 is chosen, but we know there has been a drop. We have had a couple of pretty benign winters. The case it is making to me and others is that it is not feasible to provide the appropriate road infrastructure with current levels of funding. Can Mr. McCarthy assist me with that?Mr. John McCarthy: I cannot really assist the Deputy on that one because the roads budget comes through the Department of Transport, Tourism and Sport now. I would not have-----Deputy John Deasy: The local government fund was part of that.

John McCarthy: There is a payment out of the local government fund that goes across to the Department of Transport, Tourism and Sport and it makes the allocations to individual authorities. How they would have changed between authorities or over a period of time---

Deputy John Deasy: Does Mr. McCarthy consider that the Department of the Environment, Community and Local Government has no role in the allocations?

John McCarthy: There was an arrangement in place as to how that share of the local government fund was to go the Department of Transport, Tourism and Sport, but after that we would not have any information on how that is used.

Deputy John Deasy: So that is a big "no". That is okay.John McCarthy: I regret I cannot help the Deputy on that one.

Mr. Seamus McCarthy [Comptroller and Auditor General]: If Deputy Deasy wants to look on the screen, he will see a figure from the chapter that may illustrate the point of drawing together from the various sources the funding. He can see what happened nationally to funding provided to local authorities for transport.

The Deputy can see the funding for national roads. As the Accounting Officer has said, there is a payment from the local government fund to the Department. The Department then pays out voted funds.

Some of those funds go through the National Roads Authority and so on, and then on to local authorities. The figure for national roads transfers has gone down from €1.5 billion to probably about €250 million. The amount for regional and local roads has not gone down by quite as much, but it is still down.

Deputy John Deasy: That is a massive drop when it comes to the national roads.

[Prelude Extract]Deputy John Deasy: At last week's meeting, we dealt with the special investigations unit and spent quite some time dealing with the case of Mr. Tom Galvin and the slaughtering of pigs on his farm in 2002.

At the meeting, the Secretary General of the Department of Agriculture, Food and the Marine gave an undertaking that an internal report that was conducted in 2005 by the Department would be sent for review to a new steering group being set up within the Department.

We need to ascertain whether that step or action has been taken since the meeting. If not, we should find out when the review will be called for within the Department. Maybe we need to follow up on that undertaking that was given by the Secretary General at the meeting.

I have spoken to Mr. Galvin since last week's hearing and he has indicated to me willingness to participate in that review - something that did not happen when the internal review was conducted in 2005.

The second point has to do with an undertaking given by the Secretary General on what we dealt with yesterday, the announcing of the report on the fishery harbours.

When can we expect the Department to meet Enterprise Ireland and Bord Iascaigh Mhara with regard to the promotion of business within those fishery harbours and the use of the buildings at the fishery harbours? Could we get a date with regard to that meeting? I think we should follow up on that as well.

Chairman [John McGuinness]: Deputy Deasy raised a number of issues of concern arising from last week. We asked that they would respond comprehensively in writing to the issues that were raised by the group that we had met, the individuals affected by the SIU.

We said we would highlight a number of cases where we had correspondence, for example, with Charles Farrell, Mr. Harrington and Mr. Shine. They asked that we bring those matters to their attention and said that they would respond forthwith.

Deputy John Deasy: We had also asked that they release the internal report that was cited by the Secretary General when it came to Mr. Galvin. That was agreed, pending the receipt of legal advice. I ask the Chairman to follow up that and ask if it can be made available to the committee.

Chairman: We will remind them of all of these issues and send them a transcript of the meeting. In fairness to those who made the submission, they should also receive a transcript of the meeting because Mr. O'Driscoll made it perfectly clear that he felt it was untrue or even that they might have been telling lies, to put it another way.

If that is the case, then those people should be given the opportunity to respond. I would ask that the transcript be sent to those people who made a submission and who gave us details of their experiences with the SIU.

[Extract]Deputy John Deasy: While Mr. Ó Foghlú is here, I want to ask him about the report on Cork Institute of Technology and Waterford Institute of Technology and the issues surrounding potential amalgamation.

I spoke to Mr. Kelly, as have others, and my understanding is that the report was to have been finalised in late April. There were issues about two governing bodies being changed and the change in the position of president of WIT. Can Mr. Ó Foghlú tell me where we are at with the report? When will it be published?

Mr. Seán Ó Foghlú [Secretary General, DoE]: My understanding is that Mr. Kelly is finalising the report, but still has to conclude another set of meetings the week after next with one of the institutions. In discussions with us, he judged it was best to take his time to complete the report given the turnover of the chairperson and president at WIT.

He will come to us with the report, we hope, within a couple of weeks. The publication of the report is obviously a matter for the Minister to consider and decide. We hope it will be in the public domain in the near future.

Deputy John Deasy: I asked Mr. Kelly if he would come to the committee and answer questions when his report is finally published. Can Mr. Ó Foghlú come to the committee with him if or when he attends?Seán Ó Foghlú: I am back here again in four weeks and am happy to answer questions on that day. I have already had discussions with the secretariat about answering on that day. Mr. Kelly is not available in July and August as he will be on leave, but I am certainly happy to answer questions. Of course, if Deputy Deasy wishes, I understand Mr. Kelly has indicated a willingness to talk to him.

Deputy John Deasy: As such, we are not looking at any time before the end of August.

Seán Ó Foghlú: I would not have thought so with Mr. Kelly. However, I am back here in four weeks and I understand institutes of technology issues will be among those covered. We will be happy to discuss any issues then.

Deputy John Deasy: Does Mr. Ó Foghlú expect this to be finalised and dealt with by then? In fairness, we are hanging around here dealing with this for a long time. I accept Mr. Kelly's point.

I spoke to him about the issues surrounding the changes in the governing bodies and presidential offices. That makes sense as it makes sense to delay and prolong the report. This has gone on for a very long time, however. Can we get this dealt with within that four-week period?Seán Ó Foghlú: I hope so. I have discussed it with the Minister and it is her intention to try to do that. Whether she manages will depend on the fact she must see what is in the report and come to an opinion. She may want to consult her colleagues in government in advance of publication. That is her call, not mine.

PRELUDE [Extract]Chairman [John McGuinness TD]: Item 3A.4 is correspondence, dated 5 June 2015, from Mr. Jim Breslin, Secretary General of the Department of Heath, regarding an investigation into abuse of people with disabilities in a foster home in the south east.

It is to be noted and published . . . There are HSE issues regarding the foster home that was being investigated. I express my absolute dismay that the gardaí who have come back to me directly have said that there may not be prosecutions owing to insufficient evidence and so on. I find it absolutely appalling and it needs to be discussed again by the committee.

In the course of the replies from the HSE there are issues about those who were employed to investigate and the committee needs to revisit the matter. The correspondence mentions that the HSE spends €40 million on legal fees and we need to investigate that.Deputy John Deasy: The committee has dealt with the foster home issue. We need to remember that the Garda investigated all this in the early 1990s and no prosecutions resulted. The fear I and other committee members had was that it would be repeated.

For that reason there was an imperative on Government to take the review or investigation process very seriously. That was what the committee was asking the Government to do. I believe the Government is about to make a definitive decision not only on the course of action the Department will take, but also on the policy issues that arise from the contents of the report we will submit to it.

Perhaps we should hold off for a week or so. I always had the fear, which I expressed, as, I believe, did the Chairman, that it was going to be very difficult for the Garda because of the timeline involved and because most of the individuals who were affected were non-verbal. Some of the people involved have died since these issues arose. However, we need to wait a little longer because those decisions are being made right now.

Chairman: That is why I am saying we will revisit this batch of correspondence, which covers a considerable amount of ground.